Policy Manual – Post-Issue Compliance for Tax-Exempt Bonds

The University of Maine System (UMS) finances certain capital projects through the issuance of tax-exempt bonds and it is the UMS’ policy to comply with all applicable laws, regulations and contracts applicable to those bonds.

“Tax-exempt” means that the interest paid to bondholders is not subject to federal income tax. Tax-exempt status remains throughout the life of the bonds, but this status may be lost if certain federal laws do not remain satisfied. Failure by the UMS to comply with these laws at any time during the life of the bonds may result in the retroactive and prospective loss of the tax-exempt or tax-advantaged status of the bonds or the imposition of additional taxes or assessments on the UMS.

The Board of Trustees of the UMS is responsible for ensuring UMS is in compliance with post-issuance federal tax requirements for the UMS’ bonds. To accomplish this, the Board of Trustees delegates to the Vice Chancellor for Finance and Administration and Treasurer (the “Treasurer”) the primary operating responsibility for establishing and maintaining written guidelines to support compliance and for monitoring compliance on an ongoing basis with post-issuance federal tax requirements for the bonds. The guidelines shall describe the processes used to ensure compliance with applicable laws, regulations and contracts, and identify the positions and individuals responsible for these processes. The Treasurer shall also be aware of options for voluntary corrections for failure to comply with post-issuance compliance requirements (such as remedial actions under Treasury Regulation Section 1.141-12 and the United States Treasury’s Tax-Exempt Bonds Voluntary Closing Agreement Program) and shall take corrective action when necessary and appropriate.